How to Pay Off Credit Card Debt Faster

Credit cards make everything easy—including racking up debt.

An unforeseen emergency, a large purchase, or a spend-heavy time of life like the beginning of a college semester can result in a hefty credit card bill. Making things worse, if the full amount is not paid off in a single billing cycle, your credit card debt can go from hefty to horrific pretty fast.

“Credit card debt can be crippling because of the high amount of interest you're paying,” says Barry Choi, Canadian personal finance expert and owner of “Credit cards typically charge 20% interest, regardless of how much debt you're holding, and that's quite a premium.”

For many young Canadians, anxiety about money coupled with fear or even shame leads to denial. Financial issues, especially unpleasant ones, take a back seat to other concerns simply because they seem too overwhelming to tackle head-on. This is a bad strategy. When you're holding credit card debt, your entire financial picture is affected.

“It can be difficult to manage other day-to-day expenses or save for your future,” says Choi. “And it may also affect your credit score – which could mean you may not qualify for a loan or mortgage.”

For all these reasons and more, it’s crucial to pay down your credit card debt as quickly and efficiently as possible. This article will give you some tested and true strategies and teach you how to pay off your credit card debt fast.

How to pay off credit card debt fastAssess your Current Financial Picture

Nothing inspires panic like financial problems, but you owe it to yourself to take a deep breath. This is one large problem that you can approach in smaller increments.

The first step is a complete and honest assessment of your financial picture. Write down all sources of income so you have an idea of what is coming in every month. Next, map out a realistic monthly budget. This should include the obvious expenses such as rent, phone, and groceries, but be ruthless with yourself. Do you also buy expensive coffees during the week? Put it in the budget. How about restaurant meals, Uber rides, or Amazon Prime? All these need to be in your budget.

Next, identify the areas where you can save. Even one less fancy cocktail per week will make a difference, and these small changes really add up.

“I know people won't want to hear this,” Choi says. “But cutting out the fun stuff such as eating out or travelling is a must since you can use that money to pay down your credit card debt.”

One word of warning, though: when making your budget cuts, make sure they’re reasonable and not too restrictive. You’re far more likely to overspend if you’ve not left yourself a little wiggle room. All your work building a workable budget will be useless if you don’t stick to it.

Once you’ve got your budget in hand, it’s time to build a long-term plan. Your budget is part of your plan, but it’s not the complete picture. According to Choi, developing (and sticking to!) a long-term repayment plan is the number-one tip for paying down credit card debt quickly. In this next section, we’ll look at different styles and strategies to consider including in your debt repayment plan.

Need help putting together a budget that works? Try YNAB (You Need a Budget)– an easy online personal budgeting program that can help you quickly gain control of your money, get out of debt, and save more money faster. There’s an even an app that you can download onto your phone, making tracking expenses a cinch.

How to pay off credit card debt fastAvalanche or Snowball?

There are two general ways that people go about repaying their debt, each with its own pros and cons. Understanding your options—and knowing what motivates you most—will go a long way to helping you come up with a plan you can live with.

The so-called “avalanche method” is when people pay the minimum balance on all their cards, but put any extra towards the credit card debt with the highest interest rate. Mathematically speaking, it’s the most effective way to pay down debt, as it chips away at the balance producing the most interest.

“By doing this, you pay less interest over the long run,” confirms Choi.

However, math isn’t everything. Remember: You’re building a long-term debt repayment plan, so it needs to work for you. Known as the “snowball method,” many people prefer to focus on the credit card with the lowest remaining balance so they can get a win under their belt fast. The main benefit here is the morale boost that comes with each debt that’s paid off, and research suggests that these victories are effective in keeping people motivated.

The bottom line? Go with whichever style suits you best – just stick to it!

Choose your Credit card Products Wisely

If you do it right, you can actually get your credit card itself to help you lower your debt. Consider the following savvy strategies:

Get a lower interest credit card

Transferring your balance to a card with lower interest is an effective strategy for minimizing your debt on your balance and new purchases. For instance, the American Express Essential credit card offers a fixed 8.9% interest rate on new purchases and cash advances—the lowest fixed rate in the country. Additionally, you can apply for a 1.9% rate on balance transfers for the first six months (note, though, that there is a 3% balance transfer fee). When six months have passed, your balance will be charged at the same 8.9% as your other purchases. Even better, the card has no annual fee.

Low-interest or interest-free periods of time on balance transfers can also be leveraged to your great advantage. The RBC Visa Platinum Card,  for example, has no annual fee, and offers a 5.9% interest rate on balance transfers for a full 30 months, giving you more of the time you need to bring down your debt.

How to pay off credit card debt fastTake advantage of points programs

Chances are you will still be using your card for everyday expenses, so why not make those purchases work for you? If your card has a program, you can rack up points for buying things like groceries, gas, or drugstore items, and put the money you saved towards your outstanding debt.

The most efficient way to manage this strategy is to track your most frequent expenses by category (most cards offer this information online) and choose a points program that will benefit you most. For example, if your expenses fall heavily into the gas and groceries categories, you’ll want to consider the Scotia Momentum Visa Infinite which gives 4% cash back on those purchases—the highest of any card. Additionally, you’ll earn 2% back on drugstore purchases and recurring bills. This means you can actually earn while paying your cellphone, internet, and utilities. Every other purchase gets a 1% return, making this a robust offering for $99 annually.

If you travel extensively, you may get more bang for your buck with the RBC Visa Infinite Avion. This card commands a hefty $120 annual fee but offers more than 2% return on spending, and includes many travel-centric perks like a travel insurance package. With their points program, you can book on any airline with no blackout dates, and in three airlines rewards programs you get a 1:1 points to miles ratio. Plus, the 15,000 point sign-up bonus is worth up to $375 in short haul flights. Meanwhile, you can put the money you saved towards your outstanding credit card debt – and get it paid off pronto.

Get a cash back card

Like they say, cash is king. With a product like the Tangerine Money-Back Credit Card you receive a percentage of your purchases back in cash that you can apply to your debt load. Highly customizable, this card lets you choose which spending categories to apply 2% cash back to, and you still earn 0.5% returns on all other purchases.

Negotiate with Your Credit Card Company for Lower Interest

Even if you’re happy with your current card, you might be able to strike a better deal. Few people are aware of it, but one way to get a lower interest rate is to simply call your credit card company and ask! The worst they can do is say no, but more likely than not they will offer you a reduced rate for a fixed term.

Consolidate Your Debt

Consolidating your debt can save you stress and money. Instead of managing several monthly bills, each with their own interest rate and due date, consider consolidating your debt load by transferring your balance to a low-interest credit card, or by taking out a personal term loan with a leading online lender like Borrowell. Getting a personal loan with Borrowell is simple – all you need is an internet connection and a not-terrible credit score.

“These loans and credit cards typically come with a lower interest rate so you could easily cut the amount of interest you're paying in half every month,” say Choi. “The key is to use that money you're saving on interest and apply it to any outstanding credit card balance that you may have.”

This is good advice no matter what strategy (or strategies) you decide on. If you find yourself bogged down with credit card debt, resist the urge to go into denial. Instead, develop a budget and debt repayment plan, maximize the benefits you receive through your credit card products, and stick to your repayment schedule. You may be surprised at how quickly you can repay your credit card debt.

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